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Bundled pricing in surgery centers

May 30, 2023

Rising costs for healthcare and fragmented billing practices have always been a major concern for both patients and care providers. And even more in today’s complex healthcare landscape. 

Bundled pricing promises to address these issues and improve the experience for all parties involved. That’s why the bundled pricing strategy has been gaining increasingly more interest in surgery centers nationwide.

In our recent webinar, Dr. Biraj Patel and ASC administrator, Ashley Poulos, discussed all aspects of the bundled pricing strategy with two experts, Dirk W. Carson and Becky Ziegler-Otis. 

They delved into the concept of bundled pricing for surgery centers, exploring its benefits, implementation strategies, and potential impact on the healthcare industry. 

View the full recording or read the crucial excerpts from the conversation below.

What is bundled pricing?

Dirk Carson: At its foundation, bundled pricing is a financial arrangement that puts all the included elements of a particular procedure together. For example, a total knee. So we're going to bring together the facility, the anesthesiology, the surgeon, the implants, and all the attendant costs to a traditional approach to that surgery in one episode, in one bundle. So we can set that definition on what's included and what's excluded. And then use that to set a market price or come up with a market price that is effective and sustainable.

But this cannot be a race to the bottom. This is about setting what the benchmark should be for the cost of care, as opposed to trying to drive down the price of the services to the point where we have to take pieces out of it that make it ineffective.

This is really about how we can provide sustainable pricing and the reimbursement that the provider community needs, but also in a way that we make it affordable for employers. It is about how to bring all of the services together in a way that serves the provider, the employer, and especially the employee, that patient, that’s so important to us.

Biraj Patel: So it's directed towards providing excellent service and fixing the condition. Not the — more services, more fees.

Dirk Carson: Absolutely. This is about reasonable pricing for a set of services. In one sense, we're helped by the current system where we have to find things in terms of ICD-9s and CPT codes. That gives us a starting place. But once we get that starting place, that becomes more of an anchor for us that we need to jettison.

We need to be thinking from a bundle standpoint. When I open the shoulder, I may have a total, I may have a partial, but almost anything else that I'm dealing with should be pretty much under one umbrella. I don't want to have to open it up and say “Okay, no, this is this CPT code and not that CPT code, and therefore it's not a bundle, it's a this, or it's a that”. 

We want to be able to say “It's a shoulder, folks” and we want to price it accordingly. Let's just say that half the time you have a minor debridement, and the other half you do significant debridement. Fine, we'll take that, cut it in half, we'll pay the 50% rate in between the two of them for every single surgery. And now you don't care, I don't care, because over time, it's going to all work out for everybody's purposes. But in a much more simplified, much more understandable way.

Ashley Poulos: And does it get to the point where surgery centers have that volume that justifies the medium between the two?

Dirk Carson: That's the goal. If it doesn't work out over time, we can study that too. You're still going to have some of the medical records from what happened. If there need to be true-ups at different points, or we need to move the needle one way or the other to make it more attractive or more sustainable, then that's what we do.

Bundled pricing terminology 

Ashley Poulos: Is there a certain terminology that we should be familiar with when working with bundled pricing?

Dirk Carson: Absolutely. This is healthcare, of course, so we have all acronyms all the time. In the insurance world, in the healthcare reimbursement world, we have public and private, or we have government-funded and commercial insurance. In commercial insurance, that's bifurcated in self-funded, or partially self-funded, versus fully insured.

When you think of the BUCA, which is the Blue Cross, the United Healthcare, the Cigna, and the Aetna, you’ll typically think about these on an insured basis. That means that you write them a check, your premium every month, and for that period of time all of your care is covered based on the policy that you have. The other side of this, which is the self-funded side, is an employer, and on the commercial space they actually paid most of the bills. If we use self-funded as the idea, it’s an employer that has chosen to pay all of the employees’ claims for their healthcare rather than insure, so they’re taking the risk on themselves. 

If you're a manufacturer or even a financial services company, well that's not what you do, right? You don't pay claims. 

Third-party administrators

Dirk Carson: There's a group of companies out there called third-party administrators, and that's TPA. So third-party administrators are the team or company that you hire. They work with you on an actuarial basis to help set your plan and do the things that an insurance company would do, and then pay your claims on an ongoing basis.

There are many advantages of working with a TPA versus a fully-insured program, but one of the key ones is you can craft your plan in a way that makes the most sense for your employees.

One of the examples that I've used in the past is banking. In banking, we typically have two types of people, women of childbearing age, and older men. In this case, you’ll want your plan to have things like prenatal care, prenatal vitamins, and baby care. So you’ll want to have a pan that is skewed towards supporting people that are giving birth.

At the same time, you also want to have things like cancer screenings and other types of care that will support that older demographic. Whereas, it's not as important to have things like the orthopedic benefit because you're going to have fewer people out there that are playing softball at 25 or 35.

So TPA allows you to craft that plan. They are also very supportive of the bundle community. They take responsibility for the employer for the cost of care that's being delivered to the employees.

Ashley Poulos: Do you think a lot of employers go in the direction of a TPA?

Dirk Carson: All larger employers do. It is very rare to see one that doesn't. To be more descriptive, United Healthcare and Anthem offer TPA services. So that's just the form of the service that they're providing or the risk that they're taking or not taking. But yes, the vast majority of companies that are over 500 will be self-funded. A preponderance in between one and 500 will be self-funded. Just that you have a lot more latitude in there, and there's no reason to lay off that risk on an insurance company.

Biraj Patel: You mentioned that large insurance companies offer TPA services. How does the cost of that differ between the insurance company's fees and a private TPA that's smaller?

Dirk Carson: They will often be significantly higher. 

Biraj Patel: And that cost is passed on to whom?

Dirk Carson: The employer.

Biraj Patel: Okay, so it's not in the employer's best interest to just use their insurance company as their TPA.

Dirk Carson: It bears the evaluation, but only in the context of looking at what's available to that employer.


Dirk Carson: So most of the insurance, whether that is self-funded or through an insurance company, is sold by a broker. And that broker represents the interests of the company, but they're also paid a commission to place stop loss which you have on the self-funded side (or the partially self-funded side) or they're paid a commission in overrides on the fully insured side. So there's a significant financial incentive for them to pony up to the BUCAs, the insurance companies.

Direct to employer and Direct provider contracting

Dirk Carson: One of the other players in this is direct to employer, otherwise known as DPC, that's going to be onsite and near-site primary care.

And those play a critical role in the success of getting numbers to the bundles. And the reason is, if you think about it, we're all creatures of habit. If you're told by your primary care doctor that you need to see a specialist about your knee, you go see that specialist, and you have somewhat of a relationship with them now. ​​It's new, but it's a relationship. And if at some point, you come back, and now you're told that you have to go to some other entity for a consult, that just creates friction, and it's not a good patient experience.

So if we educate the DPC and DTE providers, what we do is get that initial referral to consult with the individual who can provide that bundle. So that there's a continuity there that doesn't exist if you don't do it in that step order.

Episode of care

Dirk Carson: I mentioned early on that the bundle was a financial arrangement, and that is what it does. It's a great starting place for making changes in the market, but a lot of what we're seeing is people that are combining that with clinical pathways. So you're working with your group, your provider group to establish the protocol for that particular service. What are the 10 things that you need that patient to do before the day of surgery?

A really common one would be a couple of days before they want patients to use an antimicrobial like Hibiclens. Nobody wants their patients showing up without using Hibiclens because it makes such a significant difference to the outcome of the surgery, the potential for wound infection, and those kinds of things.

One of my clients has a care pathway included. They use red, green, and yellow, and they have people who monitor those, a concierge team. And if an individual continues to do the things they're supposed to do, it comes out green, and off they go. If there isn't, then there's intervention, somebody picks up the phone and calls them to ask whether there is a problem with the Hibiclens. And if there is a problem, they try to figure it out. On the back end, they monitor things like if a person is getting to their physical therapy appointment. If a patient reports a 3 pain score in the morning and 9 at night, they're on the phone within 6 minutes.

We know what's going to happen. They're going to end up in the emergency department. That's a guarantee. Is that the right place for the person? May very well be. But let's find out, let's get a nurse on the line with them. Let's talk through it, and make sure that we understand what they're going through.

In one of our clients in South Carolina, we've been able to reduce the emergency room visits in maternity by 50%, and we're running over 1200 maternities so far this year. So we've got a lot of data that helps us understand what's going on.

How does bundled pricing factor into the insurance landscape?

Dirk Carson: The deck is stacked against us. We're in a position where the incumbent health systems, the incumbent payers, like what's going on in that system that really discriminates against the independent provider. Health systems don't want to do bundles because they don't have to. They want that fee for service, they are designed for that fee for service. Put more in, get more out. Even the physician compensation now is almost all driven by activity, meaning the more services that they provide, the more money they make. And the hospitals are checking every single box right now. If you make a referral outside of the system, you get dinged. If you didn't make those five referrals on this type of diagnosis, you get dinged.

The problem with that is that employers are the ones paying most of the healthcare bill for the commercial community. Well, we now have high deductible plans, we now have co-pays. We now have deductibles to the point where there really is no more room for that company to have those individuals pay more.

I just heard an employer talk about how they couldn't recruit drivers for their company because the deductible was $1200, and they couldn't pay the $1200. That’s just the end of healthcare for them. So they start looking inside the health plan to figure out ways they can save on the things they’re already purchasing, if they purchase them in a little bit different way. And bundles are a perfect opportunity to do that.

And it doesn't mean that a provider will make less money. In fact, most of our providers are paid better in the bundle environment, frankly, than they are in other insured environments. 

And why is that? Because we change the site of service most often. We're working in an ambulatory environment. So we move it from the four walls of the hospital or the hospital outpatient, into an ambulatory surgery center. 

The patient experience goes through the roof. All the data we have suggests that they have a better experience as it relates to infections, rehospitalization, all the quality measures you would look for, are far improved. And the employer is seeing a delta of 30 to 50% over what they would pay in a hospital system.

In almost all cases that I'm familiar with, the employer's paying 100% of that cost. So the ASC isn't even having to chase the money from the member. They're not having to say 'Give me your credit card' when that member shows up. No, it's all it's 100% paid by that that third party administrator. So there's no chasing dollars. And what that translates to is that you have an uncollected debt amount from your traditional fee for service basis. Not here. You get 100 cents on the dollar, and you get 100 cents on that bundle that you have arranged for.

Ashley Poulos: How long does it take for the facility or the physician for that bundle payment to actually be paid?

Dirk Carson: 14 days or less. We’re working toward the goal where you will not send a bill. In 2024, we will be able to scrape your EHR. If I'm fee for service, I need to capture all of those fees or at the very least as those fees come in, I'm going to pay them out in 30 to 60 days. In our world, all I really need to know is that base procedure happen. I need to know from your ASC that the total need that we had scheduled happened, and you have the medical record that says it happened. We have the technology to come into that medical record, see that, pull it out, use that as a funding request mechanism, and then pay you. So we can make this turn almost real time.

Biraj Patel: You'd mentioned that  100% of the cost is used to cover the service of the bundle, the bundle fee. What portion of that would go towards the administrative costs of a private TPA or someone who is managing this?

Dirk Carson: The provider is going to get 100% of whatever that dollar amount was. So if we negotiated a total knee at $30,000 then $30,000 is going to come back to the provider. A nuance to this, which is worth noting, is the TPA is going to charge you to adjudicate one claim for that bundle. In the other scenario, they're going to charge you a claim fee for every single claim that hits as a function of that total knee. So there's even administrative savings that happen on the inside for the employer because of the bundle structure. There are many nuances, but also many good things happen as a result, and that is what we’re seeing.

Anatomy of an episode of care

Dirk Carson: I alluded earlier to the fact that we're following a patient from the time that they register until that day of procedure/treatment. Our episodes will run up to, typically, 90 days. But in the case of maternity, it's eleven months. We're following all the way through pregnancy to post 60 days. And in some cases, if we're talking about episodes that are diagnostic in nature, we may be looking at something that runs for a year. If we're working with somebody that has diabetes or asthma, those are going to be much longer. 

So you pick up the pre-op consulting, that's where it starts. That whole work up is included and this is where it gets important to define the inclusions and exclusions because we're pricing for the inclusions, and we're avoiding the exclusions.

In order to set the price properly, and this is always where I start with providers, we need to determine the service that we're going to provide. Knowing what's included becomes instrumental in assuring that we've got the right reimbursement structure that's tied to it.

Ashley Poulos: But as an administrator on the ASC side, we only have to worry about what's included for the surgery its, right?

Dirk Carson: That's correct. We have situations where ASCs have physician ownership that have taken on a single signature for the facility, implants, and for the surgeon. We have some situations where there are employed anesthesiologists, and in that case, they can do that as well. But it's not a requirement. What we can do is build on each of the elements. If an ASC wants to get into the game, we can help work with who your referring docs are or who are the physicians that work out of your facility.

We can sit down with them, we can work through the mechanics of what they need to do. We can talk to the anesthesia group, we can talk to the implant folks, we can talk to physical therapy if that's it on the backside. We have the ability to bring all of those entities together. So maybe it's 5 or 6 contracts that the bundle builds up to. But to the payer, to the employer, it looks like one.

Ashley Poulos: And would it be separate payments that go out or is it typically one payment that has to be divided out from the surgery center level?

Dirk Carson: Typically, we would do it individually, but we can consume 5 claims and send one bill. We can consume one bill and send 5 payments. And you have to have the flexibility to be able to do that. Most providers are not equipped to divide the money and hand it out among the providers. Some of our ASCs like that reminder of their value added that they get when they hand a check to a doctor, so they're willing to take on that role. But by and large that doesn't last very long because it's work. And then if there's ever a snafu with a payment, they find out themselves in the middle, and it's just more work than they want to get involved in. 

Becky Ziegler-Otis: That's interesting to hear, Dirk, from that perspective, because we had a model of one payment. We had a contracting entity. It was like a shell company that had everything folded up into one. So we reduced the administrative responsibilities on the provider's office, the anesthesia provider's office, and the facility. It was just all in one area. And because we did that, having it all in one area where we administered, and then we received the money back, and dispersed it. It made it cleaner and that was actually appealing in this scenario for the surgeon's office and the anesthesia provider because they didn't have to deal with any of that hassle. It was all included.

Dirk Carson: The other thing where this comes to play, in the type of structure that Becky has, is risk mitigation. The contract was held by a third party to which the facility and the physicians were party, but they were not that party. So if something went amiss from a legal standpoint and there was a lawsuit, the two entities at the center would be the third party entity that they had, as opposed to being the frontline where the facility is representing the services, let’s say, of the anesthesiologist or of the surgeon. So there is a line of demarcation that happens in that structure as a result of that. I'm not an attorney, so I suggest getting your own legal counsel on this, but that's been our experience.

Benefits of bundled pricing for patients and providers

Ashley Poulos: How does it work if a patient is having a procedure, and it's through a bundle payment, but then they have to use their regular insurance? Let’s say they need to have continued care in the hospital for some unforeseen reason. Is there ever any issue of coverage for the patient at that point?

Dirk Carson: Typically not. I talked about how the third-party administrators embrace the bundle mechanism, and that insurance companies generally don't, but we're working with a number of companies that are self-funded, using BUCA as a TPA, but also use our services.  

In that case what happens is they pay us, we invoice them, they write us a check for the services, we distribute it to providers. In the event that something untoward were to happen, then it would fall to an individual's insurance company, their base insurance, to cover those. 

However, I'm going to give you a but. As of June 1st of 2023, the whole list of the other clients that I keep mentioning here, actually has an underwritten market warranty. So if something went untoward with a bundle that was under their umbrella, all of those services up to $100,000 would be covered under that policy. So that it would not drop to the insurance and also wouldn't drop to an individual's plan for them to have to pay for it. It would drop to that policy where all of those costs would be covered.

Biraj Patel: And then I guess, it also protects the provider because they're guaranteed the additional payment in the event there was a misstep or a complication?

Dirk Carson: Absolutely. We asked the providers in our contracting, a surgeon in particular, that if there's something that happens which can be taken care of in your office in the first 90 days during the global period for that be part of the bundle. If something goes beyond that, we want everybody to continue to be paid. We want the surgeon to be paid, we want the facility to be paid. Things happen. It is relatively infrequent in the ASC environment, but it still happens. And so we're there with an insurance policy that's underwritten for $100,000 for that very purpose.

One of the things that I really like about how this plays out is that we can track the outcomes. Any input we have, we can track and provide back. We provide that data back to all of the ASCs, to all the stakeholders so that everybody can see it. It's all got the light of day shining on it. Unlike your current healthcare insurance company, we're going to show you everything. You'll get to see the claims, all the transactions, the outcomes that are the result of this, and what type of interventions are done. You'll get to see how all of those pieces come together.

Holista has a 98 Net Promoter score. What that means is that almost every single patient who goes through that would recommend it to friends and family because their experience is so much better than they're getting in other environments. And we can only tell that because we're tracking it.

Ashley Poulos: How is that reported?

Dirk Carson: You, a physician, and an employer all have dashboards you can log into. All within the confines of HIPAA, of course. You can all have access to that data, and you can see exactly where you are and what's going on. 

Biraj Patel: It seems that the outcomes are all hinging on the fact that every stakeholder in the care of this patient is interested in resolving the medical condition, they are interested in completing the episode.

Dirk Carson: That is spot on, which is different than — I need to provide more services, so I can drive more revenue.

Biraj Patel: And I think the motivation here for the provider is that they just need to fix this patient, make it all better, and then move on to the next patient.

Dirk Carson: So they can move on to their next patient, and so that the first patient can get to the mailbox to get their mail or can walk their dog around the block. This is about getting patients back to their functional life. With money still in their pocket.

Biraj Patel: And without the out-of-pocket, the deductibles, the coinsurance, the unknown. Even being an educated consumer of healthcare, I'm still confused as to what bill I'm going to get next. And that's a big deal for most people. 

Dirk Carson: I live and breathe this, and I still get bills sometimes that I look at and wonder where did that come from. You dig deep enough, and usually I'll be able to figure it out. But I can't imagine not understanding the system as complex as it is and getting that stack of bills. 

Biraj Patel: And have you ever been able to have the ‘How much will this cost me?’ question answered? The answer is — we'll wait and see. It’s like having a lovely meal at the restaurant and finding out how much it is afterward.

And we have a coinsurance. So really I should know before, because I have to pay a percentage of that claim. So it makes sense to me why patients are rightfully so upset. They don't know how much something is going to cost them.

Becky Ziegler-Otis: Dirk, wouldn't you say the engagement is better on the patient or the employee behalf because many times there is a reward at the end, if they go this route? I think you get better engagement, better compliance from the patient/employee.

Dirk Carson: First, part of that episode definition working on top of the bundle is about patient engagement. It's about making sure that there's compliance. It's about making sure that there's the concierge aspect of this. Second thing is all the providers that I work with that are in this space, understand what business they're in. And it's really the customer service business. 

I've been party to laying on the gurney side of a few of these, and it's amazing to me how much improved that patient journey is when you have people who are focused on that. How you can come into that ambulatory surgery center, be treated very well, go through the pre-op things, go through recovery, and be back in your bed that night.

How to implement a bundled pricing strategy

Ashley Poulos: How do we actually get started in this? It's a lot to take in, and I think it's hard for us to figure out what direction to go in to actually implement this system into our daily operations.

Dirk Carson: You need somebody who's been there, otherwise you'll make the same mistakes that we all made when we first started. I personally help ASCs I work with. ASCs, TPAs, physician groups, large employers, all of them. And it's all in the same in the same mold. It's working toward the same thing, which is to help both sides understand the level of services, what's included, what's excluded, the decisions that you have to make, explaining it to the physician owners and the referral physicians. Making sure that we're negotiating properly with the anesthesiologists or the device or implant folks. It is difficult to do on your own.

Becky Ziegler-Otis: I would say from my perspective, you have to really assess your situation before you put the time and the commitment into moving forward with something like this, and making sure you have the leadership alignment. If you don't have alignment from your providers whether it be surgeon, anesthesia providers, facility, to move forward in this direction, it's going to be difficult. And also case costing. You better have your case costs known so that you know how to set your accurate pricing. 

Ashley Poulos: How do you get the surgeons to commit to it and want to be actively involved?

Becky Ziegler-Otis: I think sharing with them the benefit of gaining market share, the benefit of helping patients, better outcomes. If they're independent practices, sharing with them the reduction of the red tape, of the prior authorizations and the precertifications. That's a tremendous amount of labor that they have to endure in their offices. And if you can reduce some of that, when it comes to sending the bill out, that should be a very simplified process. Sometimes it's not even a UB or a HIPAA form, sometimes it's just a quick book invoice, putting something on the portal. Also, getting your payments back quicker, and you don't have to worry about denials and appeals. Those things are very appealing to surgeons and anesthesia providers that are running a business as well.

Ashley Poulos: How long does it usually take to get a whole system in place? What sort of time frame should we be looking at? 

Dirk Carson: What I usually recommend is to start with the low-hanging fruit, the easiest things that you've got case-costed at this point. What are the things that are known that we could introduce right now? That we can do in 30 days. Then we'll work towards the harder ones. We'll start adding those additional bundles as time allows. But two, we'll also be working on understanding if all of our assumptions are right without going out with  50 different procedures on day one, we look if we nailed the ones that we’d done first. It's a walk before you fly approach, and it's been very successful. 

Biraj Patel: So it's a more phased transition, you don't just rush straight into it, just start with the smaller cases that you know the cost of and which are predictable.

Dirk Carson: Yes, it's always easier to start with something fairly well-known. We do ENT, general surgery, pain management, spine. There are 150 different versions of the specialties that get involved. We have the track to run on. We've done these, we can set up the definitions. You can plus and minus tweak them a little bit. We price for the market and for the region that you're in because there is regional pricing, and we need to take that into account. There is a playbook for it, we’re not making it up as we go.

Ashley Poulos: Are there certain regions that this is more popular in than others?

Dirk Carson: Texas  has a significant amount. The Midwest, the Oklahoma, we're seeing a lot more in the upper Midwest too, starting to see more in the Ohio area, North Carolina, and South Carolina. We have some projects going on in Florida. But also in Colorado.

Ashley Poulos: How far do patients usually travel when they go this direction?

Dirk Carson: I think it depends on how big of a deal it is. I mean, if you have stage 3 cancer, where wouldn't you travel to? And if you need an endoscopy, you may not drive more than an hour away. Most of the employers have incentives. I've got one employer that's kind of in the middle of nowhere. Their members actually drive two hours to Minneapolis for a colonoscopy.

Biraj Patel: And is there an incentive for the member to drive that far?

Dirk Carson: There is, they get it for free if they drive that far. But they get it free if they follow the protocol. If they fail to follow the protocol, they go back to fee for service. Now what that means to the number, sometimes, in one case we work with a group out of North Carolina or South Carolina called Novant. It's a $4,000 hit to the number for a maternity if they do not comply with the care pathways. So it goes from free to 4 grand. So there's a huge incentive to go to providers who are providing the bundled care, but then there's also a huge incentive to be compliant with the protocol.

Ashley Poulos: Does the member have someone directing them through the whole process?

Dirk Carson: A hundred percent. From the very beginning, they get their assigned concierge. That person stays with them throughout the entire process. The only exception is if there appears some specialty need that's more well-directed by somebody with deeper knowledge in that area. They may pass them off to a nurse, clinician, or someone else for a period of time, but there is someone with the same person all the way through otherwise.

Ashley Poulos: If they deviate from the plan, and then have to go back to the regular insurance, does it then get billed to the regular insurance? And then there's a chance of being denied because there's no authorization X, Y, and Z?

Dirk Carson: It's never happened, but I can't say it wouldn't happen. If the employer is involved, the point is that we don't want to penalize the provider for the non-compliance of the member. So we're in there making sure that the provider gets paid, and those assurances then come from the employer as well. We can't penalize you for a non-compliant patient.

Final thoughts and questions

Ashley Poulos: Do you think there's ever going to be an over saturation of this option? Or is this going to be like an overall direction that it's going to go? Because as administrator, we have so many headaches dealing with insurance companies. We'll have a procedure approved, and then they deny it even though we have authorization on it. And it's such a headache for us that we're looking for a new direction as far as how to handle our daily operations.

Dirk Carson: What I'm seeing from the self-funded employer community is a complete embrace of this. As I talked about the price delta, on that metric alone, of 30 to 50%. I can't imagine that individual, that employer, wants to go back to paying 50% or 100% more. So they're going to build their plans and build their incentives so that they are structured to support the bundled community. Hence, I see a proliferation of this. 

I think your biggest challenge may come from the ASC down the street that wants to come in and compete with you. We wouldn't let them compete on price, but they may employ PT and you don't, for instance, or maybe they've got some robotics and you don't. But it's going to be competing on medical quality and innovation as opposed to driving the price to the ground, and we're competing with the hospital systems to move that side of service more than anything.

Ashley Poulos: What are some typical mishaps that facilities make when they're trying to implement it?

Dirk Carson: I think Becky was spot on with this — you really have to have alignment. You have to have alignment from the leadership on down. If there is misalignment, it will not work. And that that means that you have to walk through the process. You really physically want to lay that process out, and then look at who's affected by that, how to perform that process, and whether we have buy in by all the folks that are along that line. And that's probably the biggest hurdle. Once you get to the rest of it, it's just aligning all the pieces. But that making sure that your leadership on down is supportive is critical.

Ashley Poulos: Do you typically work with more than one bundled pricing company? Because, like for us, we have two different companies that we've tried it out with. And it hasn't gone too far. There's been hiccups and then quickly it puts a wall up on our end. And one was we had to go into their portal, export all of the images, and then send it to the doctor. And it was a lot of back and forth, which led to the surgeon not being interested because it was very time-consuming, so they didn't see the benefit. Is that aspect improving?

Dirk Carson: I can rattle off at least a dozen organizations that are in this space right now. Everybody's got a little bit of a different structure to what they're doing, and I welcome them all. I believe that to think that we all have this 100% down would be crazy. So I want to see what everybody's out there doing and trying different and new things. But to your point, what we can't ask you to do is more and different. What we have to do is to have a structure that fits into how your business is run, how your clinical process flows, so that we help enhance those two things that we're not asking you to do something completely different. Because that's exactly what will happen, the physician will say that it's not worth it to them, so they aren't going to do it.

Becky Ziegler-Otis: There are multiple entities out there. We dealt with three different ones. And there are some points in time when you just have to walk away from the entity because maybe what they're asking you to include does not make sense for you. So you've got to make sure that you've got that set right, or sometimes they're just really all about the pricing. They're not always just as open as what Dirk is describing. So you need to understand that with the entity that you're looking at, and sometimes you can't make it work with them. But there are a lot of options out there.

Biraj Patel: And you can work with any one of them or multiple. The physician can be part of multiple TPAs, getting offers from multiple TPAs.

Dirk Carson: Absolutely.

Ashley Poulos: Do you have any surgery centers that primarily base their whole operations on the bundle pricing rather than insurance, and what sort of volume do they have?

Dirk Carson: We have seen the emergence of a number of ambulatory surgery centers which are cash driven. And all of those are built on bundles. I think it's too early to make the call whether or not they'll be able to pull that off. But if you can imagine your business being run on a cash basis as opposed to all of those auths that you have to do, the ones that ultimately get denied, then on top of that chasing the money, your revenue cycle, and your uncollectibles. All those things go away if you're in a cash business. Show up, put your credit card down, have your knee done, and go home. So it's attractive in that sense to individuals, I think. So we'll just have to see how that plays out over time. There hasn't been enough time in the market yet to really assess that properly.

Do you value educational content for ASCs like this? Then follow Dr. Biraj Patel on LinkedIn. We regularly invite experts to talk about surgery centers’ challenges and discuss ways to resolve them based on real case studies.

And if you want to fully maximize the potential of bundled pricing, your ASC must also prioritize efficient scheduling. Learn how you can optimize resource utilization and appointment management with PreferredMD surgery scheduling software.

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